C-type natriuretic peptide (CNP) is a local regulator in the brain and vascular wall. We present data to demonstrate the production and action of CNP in the osteoblast. CNP increased cGMP production, far more potently than atrial natriuretic peptide (ANP) in an osteoblastic cell line, MC3T3-E1. Since ANP and CNP are the ligands for two particulate guanylate cyclases, guanylate cyclase-A (GC-A) and guanylate cyclase-B (GC-B), respectively, these results reveal the expression of GC-B in MC3T3-E1. In addition, CNP mRNA and CNP-like immunoreactivity were detected in cell extracts from MC3T3-E1 and its culture medium, respectively. Both CNP and 8-bromo cGMP dose-dependently decreased [3H]thymidine uptake, without affecting alkaline phosphatase activity. These results indicate that CNP is a novel autocrine/paracrine regulator of osteoblast and suggest the presence of "bone natriuretic peptide system."